Credit unions

Credit unions are mutual membership organisations, members linked by something in common- usually a place of work or where they live and work (paid and unpaid).

What do they do?

Offer savings facilities for their members

Work for the benefit of members, not shareholders

Offer mainly small and affordable loans to members

May offer members a dividend (interest) on savings

Are they secure?

They are regulated as any other financial organisation

So what has that got to do with being fair and kind?

Credit Unions are mutual local organisations. They are an important part of the solution to Financial Exclusion in the Diocese. People who can’t access affordable credit or basic banking services can be excluded in many different ways.

Many people are finding saving money difficult (26% adults run out of money before the end of the month). Unexpected financial difficulty can arise from high interest or illegal loans but also events such as bereavement, divorce or redundancy.

Credit Unions can help people when they are in need. Individuals and organisations who become members and save money allow Credit Unions to make loans to members. Through making loans Credit Unions generate income (capped at 3% a month).

Maybe you feel some sense of injustice over recent history of investment banking or the practices of banks who are free to customers but charge the poorest who get overdrawn or miss a repayment deadline. Your parish could use a Credit Union instead of a Bank, you could join one yourself, or even consider volunteering to help.

‘We must help credit unions to become bigger, better known and easier to access if we want them to compete with high interest lenders.’ Archbishop Justin